Sir John Parker has backed calls for the government to support specific companies if their health is regarded as being crucial to the economy – an approach criticised by the prime minister as “picking winners”.
“If the government feels that it is important for Britain to maintain a strong presence in a specific area of industry, and there are specific businesses in this sector that need support to get them through tough times, then it seems appropriate that this assistance is provided,” one of Britain’s most respected business executives told the Financial Times in an interview.
David Cameron has ruled out the idea of “dispatching [government] officials to pick winners, fund pet projects and roll out grand top-down initiatives”, even though he has pledged assistance for “growth industries” such as high-tech manufacturing as part of an effort to “rebalance” the economy towards production sectors and investment.
Sir John said he did not particularly like the term “picking winners”, describing it as a “dangerous phrase”.
But the chairman of Anglo American and National Grid added: “Sometimes you hear the thought that the government should refrain from picking winners but should instead decide on the right races that Britain should be participating in. This seems to me to miss the point since in my experience if you are going to be a in a race then it’s a lot better to be a winner than a loser.”
Sir John is among the UK’s most experienced business executives. As well as being vice chairman of DP World, the Dubai-based ports operator, he is a non-executive director of Carnival, the cruise operator, and EADS, the aerospace and defence group. He is also a past chairman of the court of the Bank of England.
Sir John also said it was “appropriate” for any modern government to conceive a form of “industrial policy” – even he appreciated that the term had not been in vogue in recent years.
“Every corporate [large company] in the world is engaged in exercises where it looks at what areas it should be in over a 20-year period and where it should be investing capital. I don’t see that governments should operate any differently. They should be looking ahead and trying to map out where the country should be strong.”
His comments come amidst a debate about how the UK should re-orient the economy after the financial crisis. Mr Cameron has pledged to “give manufacturing another chance”, while George Osborne, the chancellor, has conjured up an image of a transformed economy “carried aloft by the march of the makers”.
Sir John’s remarks about backing specific companies came when he was asked about whether ministers should have been more inclined to grant preferred bidder status to Canadian-owned Bombardier, which operates the UK’s last remaining train manufacturing plant, in a recent £3bn rail contract awarded to Siemens of Germany.
The award of the deal to Siemens – which makes its trains in Germany – was accompanied by news of 1,400 job cuts at Bombardier’s Derby plant.
Sir John said he did not know enough about Bombardier’s train making technology to pass judgment about which company should have been given the order – but that in some circumstances it would be correct to support specific manufacturers with special government assistance if this was in the broad economic interests of the UK.
In general he said he was “encouraged” by efforts by the Con-Lib coalition to recognise there were problems in the composition of the UK economy.
“Lord Mandelson [business secretary in the last Labour government] started the process of trying to push Britain into a new direction and the current government has continued this.”
Sir John – who in his academic life gained qualifications in both naval architecture and mechanical engineering before embarking on a career in shipbuilding – reacted with amusement to recent claims by entrepreneur Lord Sugar that engineers had a poor record in business.
“A career in engineering teaches you to be numerate and put a decimal point in the right place and this is quite useful in a business career.”
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